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partnership: “It is with a great deal of reluctance that I, this
date, tender my resignation as a partner in the firm of Finley
Kumble”. Mr. Blonien subsequently joined the law firm of Whitman
& Ransom, along with former Finley Kumble partners Governor Carey
and Jim Normile and other members of the public finance
department of Finley Kumble.
Mr. Blonien received more than $64,000 in draws from Finley
Kumble in 1987.3 Petitioners did not report receiving wages from
Finley Kumble on their Form 1040, U.S. Individual Income Tax
Return, for 1987. Instead, petitioners reported Mr. Blonien’s
distributive share of partnership income from Finley Kumble on
Schedule E, Supplemental Income and Loss, in the amount of only
$15,310. Petitioners did not file with their 1987 return Form
8082, Notice of Inconsistent Treatment or Administrative
Adjustment Request, with respect to Finley Kumble, or otherwise
3Mr. Blonien testified that he received draws of
approximately $8,000 per month. The formal offer letter dated
Mar. 4, 1987, which Mr. Blonien claims he did not receive until
months later, indicates draws of $8,750 per month beginning Apr.
1, 1987. Mr. Blonien testified that the offer letter set forth
the terms of his agreement with Finley Kumble. Yet he also
testified that he thought his compensation was only about $8,000
per month. The parties did not offer conclusive evidence of the
exact amount Mr. Blonien received from Finley Kumble in 1987.
Presumably, Mr. Blonien received these draws from April through
at least November 1987 (8 months). The terms of the offer letter
suggest that Mr. Blonien likely received at least $70,000 in
distributions from Finley Kumble during 1987. In any event, Mr.
Blonien received substantially more money from Finley Kumble in
1987 than petitioners reported as income on their Federal income
tax returns.
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